India: a promising business market

India is a business market providing opportunities for U.S.-based companies to tap a young, vibrant emerging demographic that is technologically saavy.

More than 71% of the population is younger than age 35.

Projections show that up to 40% of India will enter the middle class lifestyle during the next 15 years to 20 years. That's about 400,000,000 million people.

In terms of purchasing power, India is the world's 4th largest economy while China is the world's 3rd largest. It could become the world's fastest growing economy within the next few years.

These promising figures of the buying power in India were among the items shared at the India Trade Conference sponsored by Quanta Consulting, Southern California Edison and the Port of Los Angeles. Click here for details about the 2010 India Trade Conference in Irwindale, California,

Commerce Minister Banashri Bose Harrison, Minister of Commerce, from the Indian Embassy in Washington, D.C. told attendees that India is a natural partner for U.S. companies.

“There is a degree of comfort level people in the U.S. feel when they go to India,” she said. “They feel at home and one of the reasons why is that English is so widely spoken and since both countries are democracies there is a shared value.” She remarked that in developing innovative technology, India is a perfect place since testing is less expensive making the country a good R&D partner.

Companies who select India as a market to enter need to understand the cultural differences that exist. Previously, Kelloggs tried to market a breakfast cereal in India and was unsuccessful.

While the brand was popular in the United States, it fell flat in India because breakfast is a warm, cooked meal. The concept of cold flakes wasn’t popular.

Americans who enter the country need to have patience and take time in building relationships. Ed Fuller, president and managing director of Marriott International, also speaking at the India Trade Conference, said a relationship comes with time and patience. “We had 20 dinners and visited the homes of people we were doing business with but it still wasn’t a close relationship.”

He has high regard for people in the country.

“India’s strength is its people and the ability to learn is great. We’ve been able to move our executives up faster than in other countries due to their desire to learn.”

He also remarked that Marriott in India is using fewer ex-pats than in other countries partly because business is also part of the culture and people are good at negotiating.

He noted a positive trend in India is that technology is newer than in the U.S. and transportation has a promising future with airline companies that are providing excellent service.

The government and private companies are investing in infrastructure but there is a time lag and projects are struggling to keep up with demand. Ed Fuller mentioned there are plans in India to build six new airports.

Marriott is committed to investing in the community including programs with Habitat for Humanity and a training program for children off the streets.

Ed Fuller’s advice for companies wanting to do business in India is to take time to understand the local market and learn the people before investing cash. Having local partners is essential. He told the audience that India is an environment where building business relationships takes time.

“You’re not going to fly in and fly out,” he said. “You’ve got to be there.”

Business opportunities in India are across industries.

The entertainment and media industry is the fastest growing segment of India's economy as readers on Hubpages will agree.

Aerospace, automotive, and travel are also promising market segments.

In order to do business successfully in India, it's important to balance opportunity and risk. Another challenge is facing currency fluctuations and making sure the product is priced right and realize the local market can be competitive.

Businesses need to conduct research, partner with local companies and be patient in building business relationships.